Three international bidders compete for Trinidad refinery
By Kevon Felmine / TT Guardian
Petroleumworld 10 19 2021
Approaching the third anniversary of the shutdown of the Pointe-a-Pierre Refinery, Minister of Energy and Energy Industries Stuart Young says three international bidders are in the running for the acquisition of the Guaracara Refining Company.
Guaracara oversees the refinery, which was mothballed in 2018 after the government closed Petrotrin and retrenched over 5,000 workers.
During yesterday’s debate on the Appropriation (Financial Year-2022) Bill, 2021, Young remained adamant that the government did not shut down Petrotrin.
He said it restructured Petrotrin to create Guaracara, Heritage Petroleum Company Ltd, which oversees Exploration and Production (E&P), and the Paria Fuel Trading Company, which imports and distributes fuel domestically and regionally.
He said the latter two State companies are making profits.
“Three international players right now are being assessed and evaluated. Let us see where that goes,” Young said.
The news comes months after the government thrice rejected proposals from Patriotic Energies and Technologies Co Ltd - a company incorporated by the Oilfields Workers’ Trade Union.
As for the new entities, Young reported that for the period ending June 2020, Heritage made a profit of $700 million with revenue of $3.2 billion and paid taxes, levies and royalties totalling $700 million.
For the nine months ending June, profit increased to $1.2 billion with revenue of $4.9 billion and $606 million in taxes, levies and royalties paid.
With oil and gas production forecasted to increase in 2022, the Ministry expects an increase in projected revenue. It also hopes to get royalties from both oil and natural gas production, exceeding $5 billion.
Although countries are moving away from oil and gas and toward renewable energy, Young said the Ministry is pushing increased production because it recognizes that this change will not happen overnight. Therefore, the Ministry will instruct Heritage to engage in farm out and lease agreements.
As for the future of natural gas and T&T’s transition to renewable energy, Independent Senator Amrita Deonarine says that natural gas continues to play a pivotal role in the future.
However, Deonarine said T&T cannot ignore that two of its larger producers, Shell and BPTT, already signalled a transition to renewables and hydrogen by 2050. Deonarine said changes in global climate change policy was the driver. It also means that the companies capital expenditures profile will shift from oil and gas.
“Natural gas is really in the medium term, just a transitory price to the ultimate end game of hydrogen and renewables,” Deonarine said.
She believes T&T should develop a long term strategy toward decarbonization and enable an environment to create green jobs and industries.
As for the Ministry’s push towards renewable energy, Young said it is negotiating a massive solar project called LARA to generate 112.2 MW of electricity. But Deonarine is unsure that this is the best move. She asked if the solar plant guarantees a reduction in natural gas consumption for electricity generation.
She said she did not see any model that evaluates the saving from this initiative. She also noted that the electricity grid already has excess capacity, but the government seeks to enter another purchasing agreement for electricity. She asked if the government could not find a solution whereby the financial benefits stay here.
She suggested a rooftop solar programme with a net-metering arrangement. It can reduce congestion on the grid, improve grid resilience in a natural disaster and reduce natural gas consumption in electricity generation. She suggested that a large scale solar park owned and operated by the Electricity Commission could save on foreign exchange.
Young said the Ministry was also looking at carbon capture, utilization and storage so T&T can do its part to reduce global carbon emissions. The Ministry is also working with the Ministry of Public Utilities to plan a hydrogen project.
In the 2022 National Budget presentation, Minister of Finance Colm Imbert announced that plans were proceeding with fuel liberalization. However, Young said the government has not yet implemented it as it monitors global prices. He said the government is putting things in place for the vulnerable in society by footing the bill for the increase on personal levels.
However, he asked why multimillionaires should get a subsidy when they can afford it.
“So right now, we the taxpayers are still absorbing that subsidy, but the legislation is in place. The Ministry is ready when the government takes a decision.”